At the end of 2014 Russia, Ukraine and the EU agreed to put a
freeze on the “take-or-pay” principle for five months which means
that in the period spanning 1 November 2014 to 31 March 2015,
Russia would not impose fines on Ukraine.

However, Gazprom has every right under the contract to fine
Naftogaz for failing to provide payments from January 1 to
October 31, 2014; there was no such freeze for the period of time
spanning January 1 to October 31, 2014.

Naftogaz has reacted by saying it has never paid penalties
arising from the “take-or-pay” rule and does not intend to do it
in the future. The Ukrainian company claims the “take or pay”
condition is not part of the contract.

At the same time the company welcomes the intention of Gazprom to
submit their claims to an arbitration court. “Arbitration is the
most civilized way to resolve commercial disputes when the
parties cannot find a consensus through negotiations,” said the
head of Naftogaz Andrei Kobolev, commenting on the statement of
his Russian counterpart Aleksey Miller.

“The corresponding claim will be addressed to Naftogaz of
Ukraine today, the same claim will be directed to the Stockholm
arbitration,” said Miller, quoted by RIA.

Miller estimated the total debt of Naftogaz to Gazprom at more
than $29 billion. He said $200 million are owed to Gazprom for
gas deliveries to the Donetsk and the Lugansk regions in Eastern
Ukraine.

Earlier Gazprom filed an action to the Stockholm arbitration
against Naftogaz, demanding $18.5 billion for the gas volumes in
2012-2013 that weren’t delivered by Gazprom but had to be paid
for by Ukraine under the “take-or-pay” agreement.

In April Miller proposed to extend the freezing of “take-or-pay”
during a meeting with Russian President Vladimir Putin, who
supported the idea, saying that Ukraine’s overcoming the crisis
is in Russia’s interest.

“We currently see that the level of Ukraine’s offtake of
Russian gas is extremely low. This is connected with the decline
in Ukrainian industry, with the increase in energy prices,”
said Miller.

The level of deliveries amounted to slightly more than 14 billion
cubic meters of gas in 2014, while they agreed to take 41.6
billion under “take-or-pay,” he added.

“Of course the difference is very large, and we believe it’s
possible to support the appeal of our Ukrainian colleagues to
extend the freeze on the ‘take-or-pay’ principle,” said
Miller.

Ukraine has been reducing the purchases of Russian gas since
2011. In 2011, Naftogaz bought 40 billion cubic meters, in 2013
the volume decreased to 25.8 billion cubic meters of gas and in
2014 it made only 15.3 billion cubic meters.

In April Gazprom and Naftogaz signed an additional agreement on
gas deliveries in the second quarter, and the Russian government
gave Ukraine a discount on gas supplies at the expense of the
export duty rate. On May 23 Ukraine asked Gazprom to extend the
discount until the end of 2015.Aliide, Today 2:30 PM